Economic gaps persist 50 years after March on Washington

By Michael A. Fletcher, The Washington Post

Posted:
08/28/2013 08:06:03 AM MDT

An aerial view of the March on Washington for Jobs and Freedom Aug. 28, 1963. (Getty Images)

WASHINGTON — When President Barack Obama takes the stage at the Lincoln Memorial on Wednesday to commemorate the 1963 March on Washington, he will symbolize a big part of the complicated story of the nation's racial progress in the half-century since the historic demonstration.

Can there be more convincing testimony to the breathtaking advancement of African- Americans than a black president?

Yet there is also this: Even as racial barriers have been toppled and the nation has grown wealthier and better educated, the economic disparities separating blacks and whites remain as wide as they were when marchers assembled on the Mall in 1963.

Between 1959 and 1972, the black poverty rated dropped from 55.1 percent to 32.2 percent. But since then, progress has been slow. In 2011, 27.6 percent of black households were in poverty — nearly triple the white rate, according to the Census Bureau.

"The relative position of blacks has not changed economically since the march," said William Darity, a professor of public policy, economics and African-American studies at Duke University. "Certainly, poverty has declined for everybody, but it has declined in a way that the proportion of blacks to whites who are poor is about the same as it was 50 years ago."

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That is hardly what famed labor leader A. Philip Randolph, the driving force behind the event, had in mind when he called for a mass march for "jobs and freedom." For decades, Randolph, founder of the Brotherhood of Sleeping Car Porters, the first predominantly black labor union, had pushed for economic equality for black Americans.

Speaking with his precise diction, Randolph told the throng on the Mall in 1963 that freedom to use public accommodations without substantial economic progress does not add up to full progress.

"Yes, we want all public accommodations open to all citizens, but those accommodations will mean little to those who cannot afford to use them," Randolph said in his speech. "Yes, we want a Fair Employment Practice Act, but what good will it do if profit-geared automation destroys the jobs of millions of workers, black and white?"

Randolph's words seem prescient. The march took place during a period of American economic dominance that ignited unprecedented prosperity and a surging middle class. But the nation's economy is now shaped as much by global competition and expansion as it is by domestic forces, fanning inequality and slowing the improvement in living standards for all but those at the very top.

"The economic backdrop to the anniversary of the march is the persistence of racial disparities, but you also have black people mirroring larger trends," said Steven Pitts, a policy specialist at the University of California, Berkeley's Labor Center. "Given that the March on Washington in 1963 occurred during the golden era of the U.S. economy, the desire to get on the boat made sense because the boat was rising. But now people may be getting on the boat, but it is sinking."

The march took place at a time when the benefits of American economic growth were widely shared. Between 1947 and 1979, the wages of workers at all salary levels grew by roughly the same percentages.

But between 1979 and 2007, incomes shifted drastically, with the top 5 percent of earners seeing annual salary increases more than three times greater than those in the middle, according to the Economic Policy Institute, a liberal research organization. Overall, 63 percent of total income growth went to the top 10 percent of households between 1979 and 2007, leaving 37 percent of total growth for the remaining 90 percent, according to Algernon Austin, an EPI economist.

Economists most often attribute the changing income distribution to the weakened state of unions, the rise of global labor competition, the premium placed on bankers, and others who facilitate global finance.

They also blame the failure of the minimum wage to keep pace with inflation. March on Washington organizers called for raising the minimum wage by 85 cents, to $2 an hour, which would translate into an inflation-adjusted $13 an hour in 2013. The current minimum wage is $7.25 an hour.

The nation's changing economic landscape has hit nearly all workers of all races. But it has had a disproportionate impact on African-Americans, who are underrepresented among the nation's top earners.

The black middle class, measured by the number of families earning at least $100,000 a year, has grown fivefold in the past 50 years. Now, about one in 10 black households are in that income category. The percentage of blacks older than 25 with high school diplomas has more than tripled. The number of blacks who are college graduates has grown by a factor of 10. Overall, blacks' buying power is estimated to be nearing $1 trillion, while an increasing number of African-Americans serve as company chief executives.

Yet, racial economic disparities are mostly unchanged and in some cases are growing. In 1963, blacks families earned 55 cents for every dollar earned by whites. In 2011, blacks earned 66 cents for every dollar earned by whites. The black unemployment rate averaged 11.6 percent between 1963 and 2012, more than double the white jobless rate over that time.

The stubborn persistence of racial inequality has left policymakers at odds over what to do. Civil rights leader Jesse L. Jackson is among those who argue that federal policy should aim directly at closing these racial gaps.

"There must be an attention to the zones of pain, wherever the pain is," Jackson said. "There must be a targeted plan for reconstruction. If there is freedom without reconstruction, it is freedom to starve."

But Obama has resisted targeted efforts to erase racial economic disparities. Instead, he has pushed policies, such as increasing college access and broadening health-care coverage, aimed at lifting the fortunes of all middle- and working-class Americans. He said that approach would have a disproportionate and positive effect on black Americans.

Speaking at a town-hall-style meeting at Binghamton University in New York last week, Obama referred to the economic disparities as the legacy of a long history of discrimination.

"Let's assume that we eliminated all discrimination magically, with a wand, and everybody had goodness in their heart," he said. "You'd still have a situation in which there are a lot of folks who are poor and whose families have become dysfunctional because of a long legacy of poverty."

Obama has said that closing gaps in educational achievement will go a long way toward closing racial inequalities.

Others are not so sure. "I'd love to run the president's experiment," said Darity, the Duke professor. "We really have to face up to the fact that there is a persistence of discrimination that explains a lot about income and employment gaps."

Darity called the evidence of discrimination irrefutable. He noted that the 12.1 percent jobless rate for blacks with some college education was higher in 2012 than the 11.4 percent rate for white workers who have not finished high school. He also pointed to work by Princeton University researcher Devah Pager, who found that a black job applicant with no criminal history got a callback or job offer about as often as a white applicant with a felony conviction.

A way around that type of entrenched discrimination, Darity said, is to have a direct federal hiring program or a government job guarantee. That idea, he acknowledged, is little more than a dream, given the nation's political climate.

In the meantime, other researchers say policymakers should look hard at reshaping policies that exacerbate racial inequality. Tom Shapiro, a Brandeis University professor whose research focuses on racial inequality, noted that a long-term study of black and white families found that median white households had median wealth of $265,000, compared with $28,500 for black families, nearly a 10-to-1 gap.

That disparity, he said, has grown in recent years and is aided by a slew of popular policies, from the mortgage-interest deduction to tax deferrals on retirement savings, that favor the well-off, who typically have bigger mortgages and can put more money aside for retirement. Taken together, the tax breaks amount to more than $400 billion a year, Shapiro said.

"This amounts to a public subsidy for home ownership and retirement," Shapiro said. "The distribution of these rewards are highly skewed."

He said the top 5 percent of wage earners receive 53 percent of those tax breaks, while the bottom 60 percent of wage earners earn 4 percent. "If we redesigned these home ownership breaks in a way that includes renters and made other relatively simple changes to make the distribution more equitable, the returns to families of color would be much greater," he said.

Without policy changes, incomes for average workers seem stuck. Since 2000, median household income — a figure economists see as a key indicator for the well-being of the middle class — is down 7.2 percent, according to a report released last week. The decline has continued since the recession officially ended in 2009. In the past four years, median white income is down 3.6 percent, to $58,000. For blacks, the decline has been steeper, down 10.9 percent to $33,519.

It recalls the type of economic inequality that march organizers flagged 50 years ago.

"The struggle began with the problem of buses and lunch counters and theaters — in a word with the problem of dignity," Bayard Rustin, the chief organizer of the march, wrote in the march's aftermath. "But since the roots of discrimination are economic, and since, in the long run, the Negro, like everyone else, cannot achieve even dignity without a job — economic issues were bound to emerge, with far-reaching implications."

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